Wednesday, June 2, 2010

Five Year Budget Projection

The school board directors will have a final vote on the school district budget next Tuesday. I have written quite a bit about some of the outside forces that impact the school budget. You can find those here, here, and here. Today, in a very brief blog, I will discuss what the school district's budget will look like in five years if the school district keeps the status quo. The school district purchased a budget planning model so the board would be able to see how different scenarios impact the budget over the next five years. The budget planning model was provided by Education Financial Decisions. The model allows the school district to input different budget scenarios by controlling inputs in different areas of the budget. For example, the school district can input what we anticipate the insurance increase will be over a few years and then evaluate how that affects the budget. There are many areas of the budget that we can control. The problem is the areas that the school district does not control. The two biggest are the increase in the pension fund and the anticipated decrease in state funding. I am sharing with you the scenario that just keeps the district at the status quo. Keeping the status quo means not raising taxes and maintaining the present staffing level. As you can see when you open up the file, the school district will have a deficit of almost 7 million dollars if the school district does nothing different. That number reflects using the school districts entire fund balance of over 2 million dollars. Obviously, there will have to be changes in the way the school operates and how the community funds the school if RASD will stay viable. The school district will meet this financial challenge while increasing student achievement over the next five years.